Mortgage Payment Protection Insurance

Please note these are general guides to insurance and do not constitute provision of advice or indicate that a particular product is appropriate for you. Benefits, conditions and exclusions vary from one Accident, Sickness and Unemployment insurance policy to another and you should always check the ASU policy summary and policy document to make sure that you understand what you are buying. If you have any questions please talk to your insurance broker.

What is ASU or MPPI? ASU stands for Accident, Sickness and Unemployment insurance. MPPI stands for Mortgage Payment Protection Insurance. They are generally regarded to be the same thing. If you are unable to work due to an accident, suffer a period of sickness or hospitalisation, become unemployed or be unable to continue your business if you are self-employed, the policy will pay out to cover your monthly outgoings for up to 24 months.

Am I eligible for cover? Cover is normally available to you if you: have been in continuous employment for the 6 months immediately prior to the start date, are aged between 18 and 64 inclusive, are permanently resident in the UK, Channel Islands or Isle of Man and are not aware of any impending unemployment.

Can my spouse and I have a joint policy? Yes. A joint policy application can be made and the cover will be directly proportionate to your income splits. For example, monthly outgoings are £1,000 with the primary earner having salary of £50,000 and the secondary earner £25,000. The joint policy would be split giving the primary earner £660 of cover and the secondary earner £340.

Are there any restrictions to the number of claims I can make? There are no limits to the number of times you can claim. Each claim, however, will normally be subject to expiry of the Waiting Period and at least 6 months continuous employment.

If I have to make a claim when would I receive payments? This varies enormously from one contract to another and is often the source of much confusion. Our advice is to ensure that any policy you purchase has "back to day 1 cover". This means that you will receive your payment at the end of the month from when the loss occurs. In the case of Accident, Sickness or Loss of Employment, your first payment will therefore be made on the 31st day following the day you are first prevented from working. This is obviously the best because you would receive a payment when you would normally be receiving your salary, so you won't run into problems paying your mortgage or other expenses. Some polices give you an option called a deferment period. This means that your payments are delayed for say 30 or 60 days. If you choose one of these policies it would mean that the first payment won't arrive until 30 to 60 days after you are prevented from working, and even then you may have to wait until the end of the month. This can cause serious (although temporary) financial hardship.

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